Interest rates currently stand at 4.5 per cent, following two quarter per cent increases in a row. Analysts expect the MPC to introduce a further quarter point rise in August to 4.75 per cent.

Bank of England governor Mervyn King has warned that rates may have to keep rising in order to cool house prices.

Societe Generale economist Brian Hilliard told BBC News Online: "The Bank has made a strong point with back-to-back moves and cannot expect an instant response to those and so it would be reasonable to time the next move to coincide with the next inflation report."

KPMG chief economist Andrew Smith said: "The MPC has already upped the tempo of monetary tightening, from a quarter point to a half point in the last two months . . . nevertheless, the respite will probably be brief.

"Given robust growth, there is an argument that the sooner rates return to their 'neutral' level, where they neither stimulate nor depress the economy, the better.

"A rise in August would leave rates on track to move into the five to 5.5 per cent range, estimated by some to be the neutral level, by year-end."

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